In today's modern business landscape, simply following the status quo is no longer enough. Business leaders are faced with greater challenges, fiercer competition, and a higher level of uncertainty, making it increasingly more difficult to operate a company.
For these reasons, business leaders must rise to the challenge and implement more strategic processes if they are going to succeed within their respective industries. One such tactical approach for improving performance is through strategic business partnering.
Business partnering: how does it work?
Business partners are individuals who serve as a bridge between the different business functions to create value and improve efficiencies within an organization. This individual, whether from IT, HR, Marketing, or Finance, must have extensive knowledge of a company's operational processes and have the in-depth business acumen needed to best serve the overall company.
An executive business partner can also be viewed as the glue that binds the organization together. These members fill in operational cracks and connect senior management together to align on business strategy and goals. Through a strategic business partnership, these professionals are able to tackle current concerns, provide functional expertise, and ultimately give a business a competitive edge over other players within their industry.
Zooming into Finance business partnering
Why are business leaders shining a light on the Finance department specifically? It's because these individuals play a distinct role within the organization and have greater insight into the overall health of the business.
Today, modern companies are increasingly searching for effective business partners that can lead all functions toward achieving organizational goals. By leveraging strategic planning, tracking financial KPIs, and following financial planning and analysis (FP&A) best practices, Finance executives can provide the analysis teams need to achieve ambitious growth targets and excel within their industry.
Finance business partners use financial information to track performance and provide management with greater insights into the inner workings of the organization. Through this collaboration, Finance leaders can better align and inform the Leadership team on how to set business objectives and approach the company's biggest challenges. This might also involve providing insight into headcount planning, managing cash flows, or extending cash runway.
Why Finance leaders serve as the perfect business partners
It's not by chance that business leaders are relying more and more on the Finance function. The Finance team holds the analytical insight to support decisions that leads to the greatest business impact. By leveraging strategic financial business partnering, executives can gain in-depth advice on how to improve efficiency.
When reviewing the company at large, the Finance team is one of the only units that looks at all aspects of the company. While the Sales team might be concentrated on driving revenue and Marketing might be prioritizing lead generation, Finance has more general goals that benefit the entire organization. Because of this, these team members can strike the right balance between operational efficiency and team success.
Lastly, masterful business partnering results when partners can provide management with a holistic view of the internal operations. The source of this knowledge remains within the Finance team's daily tasks and practices. As a strategic partner, Finance and Accounting professionals are able to connect the dots, unlike any other function, to uncover common objectives, surface emerging opportunities, and align all members on the same roadmap.
How Finance business partners add value to an organization
So why are Finance professionals the best suited for a business partner role? Below, we dive into the top reasons why Accounting and Finance leaders serve as the most effective business partners.
Allows organizations to rely on data, not assumptions
Data allows business leaders to look under the hood of their company and assess performance. Without depending on data, executives would be shooting in the dark and would not be able to back their decisions with concrete proof. By using a Finance business partner, organizations are able to simplify the decision-making process and reduce uncertainty by providing clarity with cold-hard facts.
Provides a birds-eye view into business operations
In order to measure success, you must be able to identify your progress. Without having a holistic view of a company's financials, business leaders would never be able to navigate their organization in the right direction. A Finance business partner helps to communicate these insights to all functions, boosting both strategic thinking and business planning across all teams.
Influences critical business decisions
In today's constantly-evolving market conditions, business leaders must react quickly and plan for the unexpected. Executives often have a small window when contemplating make-or-break decisions. By being able to react quickly and foreshadow changes in the market, organizations can achieve a competitive edge and advance through turbulent times stronger than ever.
Empowering teams to operate more efficiently
When the heads of business departments spend less time analyzing raw data, they can allocate more time toward value-added strategic work. By refocusing on strategy, management can then prioritize projects that are going to move the needle. A collaborative approach between teams not only creates effective relationships but also allows each function to focus on improving efficiency and productivity within their respective units.
Top Competencies of a Financial Business Partner
Looking to hire a strategic business partner or become one for your company? Here are a few of the top competencies all financial business partners must possess.
High analytical skills
At its most basic level, partners must have a solid foundation of Accountancy and Finance knowledge. Having an understanding of the latest business processes, industry changes, and market conditions is also essential for any business partner. By having operational awareness and being well-versed in company analytics, business partners can offer advice on how to operate a business efficiently.
Communication skills
One of the most important aspects of business partnering is communication. Developed communication skills are what allow business partners to communicate with internal and external stakeholders on strategy and execution. By being able to clearly articulate messaging around business plannings, partners can influence and impact the business at a greater scale.
Relationship builder
One of the biggest challenges companies face is a lack of communication and collaboration across business units. For this reason, it is imperative that leaders make a conscious effort to break down operational silos and instead focus on a more holistic business strategy. A strategic business partner should be able to communicate with empathy to other functions and establish solid relationships between teams so that all employees can work towards a common goal.
Global and agile mindset
As we've seen more than ever before, the business landscape is constantly evolving. All business leaders must be able to forecast these changes and adjust business plans swiftly. By taking an agile approach and adopting a long-term vision for the business, partners can better support critical decision-making required to surpass challenges.
Appreciation for technology
Successful business partners know which technologies are going to scale their organizations. Financial business partners must be knowledgeable in all the latest software solutions on the market so they can advise business leaders on how to build a robust tech stack to improve efficiency. For example, Finance business parnters may recommend implementing strategic finance software that can help streamline data collection processes and provide greater insights for the management team.
How to get involved in Finance business partnering
If you are working within a finance function and want to expand your skill set to take on a more strategic role, consider how you can influence the bigger picture of the company. By diving into business issues and long-term strategy, you will be able to provide your own insight from a Finance perspective and add value like no other function can.
Another excellent way is to start forming relationships between different functions. Once again, a business partner should not be siloed within their respective field. See how other functions influence the internal operations of the business and look for opportunities where you can improve cross-functional collaboration. Not only will this provide you with a deeper understanding of how each unit operates, but you will also be able to provide greater support for business performance through your technical expertise.
The importance of finance business partnering
Finance is one of the most crucial functions within any organization. It's responsible for managing cash flow, forecasting future revenue and expenses, and ensuring compliance with regulations. As such, it has a significant impact on the success or failure of a company. Therefore, it is essential that finance business partners have strong leadership qualities and are able to effectively manage complex financial processes.
If you are looking to improve internal operations and take your business to the next level, consider adding a Finance business partner to your lineup of business leaders. This person will be able to help you navigate the complexities of running a successful business while providing valuable insights on the financial side of things.
For more help on how to elevate your financial planning and analysis processes, contact our team and see how Abacum can help.
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